Manchester United’s latest filing to the U.S. Securities and Exchange Commission (SEC) reveals that £120million has been cleared from their revolving credit facility following Sir Jim Ratcliffe’s $300m (£234.2m) cash injection.
When United released their financial results for the second quarter of the financial year on Tuesday, it showed their debt totaling £773.3m, which excludes money owed in transfer fees.
But late on Wednesday night, a more detailed filing to the SEC showed that on February 28, United paid off £120m worth of debt — reducing their overall debt down to £653.3m.
The club’s revolving credit facility — think of it as a credit card — has a limit of £300m and the balance now stands at £140m, down from £260m, following the payment.
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United sources note how it is normal when you get an injection of cash to pay down a short-term, high-interest debt and that is a sensible course of action regarding short-term cash management.
But when Ratcliffe announced his £234.2m cash injection, the plan was for it to be used for infrastructure purposes.
United insist using the cash to clear some of their debt does not change the fact the £234.2m will be used for infrastructure investment in due course, with the expectation being that it will end up significantly higher.
By paying £120m off their revolving credit facility, they could now borrow that money elsewhere at a lower interest rate and use it towards infrastructure investment, therefore maintaining Ratcliffe’s £234.2m pledge.
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Last week, United announced the creation of a task force to explore “options for regenerating the Old Trafford area of Greater Manchester”, with the development of a “world-class” stadium at the heart of the project.
The task force will work with the club to decide whether to improve Old Trafford or build a new stadium entirely. They aim to report back with their recommendations later this year.
Their SEC filing also reveals a £5.5m payment to Richard Arnold after he stepped down as the club’s chief executive in December.
Arnold will be replaced by Omar Berrada, with The Athletic revealing in January that he had agreed to leave his role as the chief football operations officer at City Football Group, which ultimately owns City and a host of other clubs across the globe, to join United in the summer.
When it was announced that Berrada will be arriving, United said in a club statement that they are “determined to put football and performance on the pitch back at the heart of everything we do,” before adding that “Omar’s appointment represents the first step on this journey”.
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(Mike Egerton/PA Images via Getty Images)